It's saying there is a set of natural numbers [∃S ⊆ Nat] that has the property that for every number y in S [∀y ∈ S], every divisor of x [(x | y)] is either y itself, or 1 [(x = y) ∨ (x = 1)]. You can probably guess that S is the set of prime numbers, and 1.
To get the composites, you can negate the inner phrase to get
∃S ⊆ Nat: (∀y ∈ S : (~∀x ∈ Nat : (x | y) ⇒ (x = y) ∨ (x = 1))))
which is equivalent by De Morgan's Law to
∃S ⊆ Nat: (∀y ∈ S : (∃x ∈ Nat : (x | y) ⇏ (x = y) ∨ (x = 1))))
which is in turn equivalent to
∃S ⊆ Nat: (∀y ∈ S : (∃x ∈ Nat : (x ≠ 1) ⋀ (x ≠ y) ⋀ (x | y))))
In English, this means there is a set where each member x has a divisor other than 1 or x, i.e the composites.